Malaysia, with population of about 28 million, is one of the fastest-growing economies in Asia. Although blessed with petroleum resources, this strategically-important Southeast Asian nation is relatively a small producer with reserves of 5.5 billion barrels of oil and 88 trillion cubic feet of natural gas. Malaysia has significant natural gas exploration and development in the Malaysia-Thailand Joint Development Area, located in the lower part of the Gulf of Thailand, which is highlighted by almost three-fourth share of natural gas in the energy mix in 2009.
During the last decade, Malaysia has seen almost 20 percent increase in energy generating capacity from 13,000MW in the year 2000 to 15,500MW in 2009. The maximum demand for electricity last year was 14,000MW in Peninsular Malaysia, 700MW in Sabah and 900MW in Sarawak. Electricity generation in Malaysia is projected to grow further at an average annual rate of 4.7 percent. Most of power stations in Malaysia are based on fossil fuels as the energy mix is heavily dominated by natural gas and coal. Thermal power plants contribute 86 percent while hydropower plants account for 13 percent to the electricity generation capacity. Tenaga Nasional Berhad (TNB) is the largest electricity utility company in the country with generation capacity of 10,481MW. Other major utility companies are Sarawak Electricity Supply Company (SESCO) and Sabah Electricity Limited (SESB).
Under the 8th Malaysia Plan (2001–2005), the government of Malaysia changed the Four-Fuel Policy (based on oil, gas, coal and hydropower) to the Five-Fuel Policy with the addition of renewable energy as the fifth source of fuel.
The Ninth Malaysian Plan (2006-2010) targets 350 MW of grid-connected renewable electricity by with fuel mix of 40 percent gas, 40 percent coal, 10 percent hydropower and 10 percent renewable energy. Another major development in the offing is the proposed introduction of feed-in-tariff for renewable energy in 2011.
Renewable Energy Resource Potential in Malaysia (in MW)
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Among the various sources of renewable energy, biomass seems to be the most promising option for Malaysia. In line with the promotion of using biomass energy, a Biomass Power Generation & Cogeneration Project (BioGen) was commissioned in October 2002. Photovoltaic (PV) systems are also another attractive renewable energy source for Malaysia as climatic conditions are favorable for the development of solar energy. However there is not much development in the domestic PV market despite the fact that Malaysia is currently the world’s fifth largest producer of PV modules. To encourage the development of grid-connected PV systems, the Government is providing financial incentives through the Malaysia Building Integrated Photovoltaic (MBIPV) Project.